Protecting Your Property Through Wills and Tenancy in Common

Protecting Your Property Through Wills and Tenancy in Common

When we pass away, we usually want our children to inherit the properties we have worked to pay for during our adult lives. Many people are under the impression that this will automatically happen in the event of their death as long as they have a will which expressly wishes this to be the case, but unfortunately, there are several reasons why this won’t always happen.

For that reason, one of the most important things that you can do to ensure that your children or loved ones stand to inherit is to set up an agreement which names you as a Tenant in Common if you own a property with another person.

Why Would My Children Not Automatically Inherit My House?

When two people buy a house together, they usually immediately become Joint Tenants of that property, entitling them each to 100% ownership. If one partner happens to pass away, the other will automatically inherit the entirety of the house.

The issue arises when the surviving partner decides to remarry, as their new partner will then automatically obtain rights to that property which could see the children of the surviving partner or the intended beneficiaries of the house lose out.

What Are Tenants in Common?

Becoming Tenants in Common and changing the title on your property deeds will allow you to assign a percentage ownership between yourself and the person you own the property with. Each party is then able to protect this percentage and leave it in their will to the people they choose to as desired, as soon as the probate process is complete.

In the event of either partner dying, the surviving partner would only be entitled to the agreed percentage of the property with the remainder being protected for the intended beneficiaries.

Other Points for Consideration

There are several other reasons why specifying a Tenancy in Common is desirable which include;

* Protecting the asset against being used for care fees due to illness. The value of any property owned is considered before a Local Authority will provide help if either partner needs an element of care in old age.

* If the couple who own the property are unmarried, being Tenants in Common can reduce the amount of inheritance tax which will become due in the event of death.

A Tenancy in Common agreement has the ability to prevent your property being used to pay for care fees and is also an attractive way to limit the amount of inheritance tax your named beneficiaries will be liable to pay. Appointing powers of attorney could also provide a way for you to ensure that your assets are handled in accordance with your wishes should both you and your partner be approaching old age.

Discretionary Trusts

In addition, the formation of a Trust is another way to ensure that your assets are protected and ringfenced for those who you wish to benefit. A Discretionary Trust can be combined with both a will and with a Tenancy in Common agreement.

Review Your Tenancy Agreement

If you currently own a home with a partner you are married to or otherwise, we would suggest getting in touch with our team of professional consultants so that we can provide advice on your situation. To make use of our services, call Heritage Wills on 01603 894500 for more information or personalised advice.

A Guide to Setting Up Trusts to Protect Your Assets

A Guide to Setting Up Trusts to Protect Your Assets

Whilst most people are familiar with the process of writing wills so that their wishes can be expressed in the event of death, Trusts remain relatively uncommon even though they present many benefits and can be a great way to protect your assets and estate.

There are many reasons why it might be a good idea to consider the formation of a Trust, even if you feel as if the assets you are in possession of are minimal or if you believe that your will already fully represents your wishes.

What is A Trust?

A Trust is considered to be a way of actively managing a range of assets including money, property, land or other valuable assets. It is important to remember that there are several different types of Trust, all of which are taxed differently, making some more suitable than others depending on your requirements. Unlike a will which must proceed through probate after death, a Trust can be called into action immediately.

The two most common types of Trust include;

  • The Discretionary Trust – A common way to minimise inheritance tax by maximising the inheritance tax allowances of unmarried couples for the benefit of their intended beneficiaries.
  • The Lifetime Trust – A common way to transfer the ownership of assets to other entities whilst still maintaining control over them as well as the benefits they provide.

The Parties Involved

Trusts usually involve three parties who hold a specific title under the Trust. It is also possible for one individual to be named under several of these titles if required.

  • The settler is the individual who places assets into a Trust for the purpose of protection.
  • The trustee is the individual who manages the trust and the assets contained within it.
  • The beneficiary is the individual who stands to benefit from any assets contained within the Trust.

A Lifetime Trust for example would usually see one individual named as all three parties if they were attempting to minimise their tax liability whilst receiving an income or dividend payments.

Common Reasons for Setting Up a Trust

As mentioned, there are several other reasons why someone might wish to establish a Trust which include:

  • The control and protection of important family assets which need to remain within the family.
  • When a young member of the family has inherited a large sum of money but is incapable of handling their affairs.
  • When someone has been incapacitated and can no longer handle their affairs.
  • The passing on off assets to another party whilst still alive.
  • When someone is considered to be vulnerable due to disability or when someone under the age of 18 has experienced the death of a parent.

Establish Your Trust

Heritage Wills are well versed is establishing both Discretionary and Lifetime Trusts. We have the knowledge and expertise to advise further on these matters as well as to assist you in establishing powers of attorney if required. For further information, speak to a member of our team on 01603 894500 who will be to advise further on the different options available.